The large majority of the increase in the federal budget deficit in recent years is a direct result of the recession, which has left millions of workers unemployed or underemployed, reducing tax receipts and requiring increased safety net spending.

The chart in today’s Snapshot identifies three key sources of the projected $1.2 trillion increase in the federal budget deficit since the start of the recession through 2010. While the jobs lost due to the recession contribute to a higher deficit in a variety of ways, unemployment insurance payments are a relatively small factor. Expanded unemployment insurance payments account for 11.4% of the increase in the deficit since the recession began.

Sign up to stay informed

Track EPI on Twitter

EPI is an independent, nonprofit think tank that researches the impact of economic trends and policies on working people in the United States. EPI’s research helps policymakers, opinion leaders, advocates, journalists, and the public understand the bread-and-butter issues affecting ordinary Americans.